SIP Calculator
Calculate the future value of your monthly Systematic Investment Plans.
Summary
The Systematic Investment Plan (SIP) has fundamentally democratized wealth creation in India. Unlike the volatile world of stock trading or the low-yield safety of savings accounts, SIPs offer a balanced path to compounding wealth. By investing a fixed sum regularly (as little as ₹500/month), you navigate market volatility without the stress of "timing the market."
Whether you are planning for a dream home, your child's education, or a comfortable retirement, our SIP Calculator eliminates the guesswork. It projects your potential wealth based on historical market performance and the mathematical certainty of compounding.
🚀 Why Smart Investors Choose SIP in 2025
- Rupee Cost Averaging: This is the secret weapon of SIPs. When the market crashes, your fixed installment buys more units. When the market peaks, you buy fewer units. Over time, your average cost of acquisition drops significantly below the market average.
- Financial Discipline: Automated deductions ensure you save first and spend later. This removes the emotional bias of holding back cash when markets are scary.
- The Eighth Wonder (Compounding): In a SIP, your returns are reinvested to generate their own returns. Over a 15-20 year horizon, the interest component of your portfolio often exceeds the principal investment by 2x or 3x.
- Flexibility: Unlike an Insurance policy or PPF, you can pause, stop, or increase (Step-Up) your SIP amount at any time with a click.
The Math Behind the Magic: How SIP Works
While our calculator does the heavy lifting instantly, understanding the formula helps you trust the numbers. SIP returns are calculated using the Future Value of Annuity method.
Where:
• FV: Future Value (Maturity Amount)
• P: Monthly Investment Amount
• i: Monthly Interest Rate (Expected Annual Rate ÷ 12 ÷ 100)
• n: Total Number of Installments (Years × 12)
SIP vs Lumpsum: The Ultimate Showdown
Investors often ask: "I have ₹1 Lakh bonus. Should I invest it all at once or start a SIP?" Here is the definitive comparison:
| Parameter | SIP (Systematic) | Lumpsum (One-Time) |
|---|---|---|
| Market Timing | Irrelevant (Best for beginners) | Crucial (Must buy low) |
| Volatility Risk | Low (Averaged Out) | High (Immediate exposure) |
| Ideal For | Salaried / Regular Income earners | Windfall gains / Business profits |
Taxation on Mutual Fund SIPs (Updated FY 2025-26)
Your SIP returns are not entirely tax-free. The tax liability depends on the type of fund (Equity vs Debt) and your holding period. Here is the latest tax structure:
Equity Mutual Funds
(Funds with >65% exposure to stocks)
- STCG (< 1 Year): Flat 20% tax on gains.
- LTCG (> 1 Year): Gains up to ₹1.25 Lakh/year are Exempt. Gains above this are taxed at 12.5%.
Debt Mutual Funds
(Funds investing in Bonds, G-Secs)
- Taxation Rule: Gains are added to your annual income and taxed as per your Income Tax Slab rates.
- No indexation benefits are available anymore (post-April 2023).
Frequently Asked Questions
Can I stop my SIP anytime?
Yes, SIP is a voluntary contribution. You can cancel the mandate via your net banking or AMC portal instantly. Note that stopping a SIP does not mean withdrawing the money; your existing units continue to grow.
What happens if I miss a SIP installment?
Generally, the AMC will re-attempt the transaction. If it fails 3 consecutive times, the SIP may be cancelled. Banks may also charge a 'bounce charge' for insufficient funds.
Does SIP guarantee returns?
No. SIPs invest in market-linked instruments. While they historically beat inflation and FDs, they carry market risk. Past performance (12-15%) is not a guarantee of future returns.
What is Step-Up SIP?
A Step-Up SIP allows you to increase your investment amount automatically by a fixed percentage (e.g., 10%) every year to match your salary hikes.
Is SIP covered under Section 80C?
Only SIPs in specific <strong>ELSS (Equity Linked Savings Scheme)</strong> funds qualify for tax deduction up to ₹1.5 Lakh under Section 80C. Normal equity or debt funds do not provide tax benefits.